The Managing Director of X3M Ideas, Steve Babaeko has said he would rather his company take up shares in businesses his agency handles than be paid retainers.

Babaeko whose company was rated as one of the top 50 businesses in Africa by Financial Times, spoke on C-Suite Café, a podcast hosted by journalist and brand analyst, Ikem Okuhu, said his journey into entrepreneurship was inspired by the desire to break the myth long held among agencies that those in the creative side of the advertising business could not run their own agencies successfully

“As an entrepreneur, I don’t just want to work for the client; I want to become a shareholder, so most of the companies we work for that are listed, I am a shareholder. So, if you see me pushing my team so hard, it’s because we have a stake in the business. It is not enough for us to collect cheques from the client because we did advertising work, it Is more because I know that if the client makes a profit, I will be smiling to the bank. After all, I know I have a stake in the business. I am sure if you speak to CEOs of many businesses, you will not hear this kind of thing I am telling you now. So, the key to the game Is differentiation,” Steve, whose agency now operates in Dubai and many African countries, said.

He revealed that for companies that are not listed on the stock market, he requests stakes instead of fees in the business, because it gives his team the energy to work harder and be focused on profits.

“There is a foodtech company we are working for now, and from day one, we insisted that they give us a stake in the business, and now they have given it to us. It is a clearly different way of thinking,” he said.

Continuing, Babaeko said, “I spoke at an integrated marketing communication conference in Johannesburg in 2024, and I told them that stubbornness is a virtue, and this conversation we are having now is about stubbornness being a virtue. I could see that you cannot be doing the same thing all the time and expecting different results. To achieve more, you have to take certain risks, and taking those risks means diversifying your portfolio, checking those that will give you retainers and those from which you earn dividends as a shareholder, and structuring them in ways that help you balance your risks.

“There are businesses we took that, in hindsight, I wish I had been thinking like this when we took those businesses. We took the brief and built that company, and about a year later, they were making almost five million Pounds in revenue annually. Imagine if we had taken a one percent stake in that business then? And I am not even sure that they would have refused, if we had asked at the time.”

He said that taking a stake in a client’s business is a clear demonstration of your belief in the business and your trust in the efficacy of the prescriptions you are bringing into play.

“There is a Yoruba proverb that says that if one is sure of his or her juju, he or she uses it to his or her own chest or head first. In the same vein, if you are sure that what you are going to do for your clients will work. It is when you are not sure that you will tell the client to give you the cash for work done so you can bail out,” Babaeko explained.

He also revealed that when his agency started out 13 years ago, he threatened to fire any employee who referred to X3M Ideas as a new agency.

“I told the seven of us that began this journey together that anybody who calls this agency a new agency or a small agency will be fired immediately. We are not a new agency; we are not a small agency. It was that mindset that has driven us these past years. We are not a new agency, we are not a small agency, and it is this mindset that has enabled us to connect with clients across Africa, won the first Cannes Lions for West Africa. Being able to achieve all of the things we have achieved is the crystalysation of the years of hard work and focus on the clear objective of being the best in what we do.

“If you trace the history of entrepreneurship in the world, you will find that even in terrible economic times, some people who can think differently can become like the phoenix and rise from the ashes of the terrible times. During the Great Depression, some fantastic companies came out of the period, and so that is the way it is. Africa may be going through it at the moment, but there is still room for a lot to happen. Africa is such an emerging territory, and people can connect to your different vision, different thoughts, and you can go somewhere totally different. I think from day one, we were able to channel our energy towards differentiation for ourselves as an agency and for our clients.”